How Chandra Grew his Small Physical Store into a Successful eCommerce business


Few years ago, I met Chandra, a brick and motar retailer, who was skeptic, like many others, about the success of eCommerce in India. “Who would buy online” and “Why would they buy from my online store” were questions everyone had about eCommerce then. Despite his doubts, Chandra decided to venture into this new channel of sale. He had a static website and catalogue and made sure he was listed in all “yellow pages” directories on the net.

Once the portal was up, came another obvious question- “how will it attract traffic? “. He was helped here by local listing by Google and SEO and PPC campaigns. Chandra had the first mover advantage – attracting traffic with a diminutive budget established Chandra’s confidence in generating business from this portal.

By concentrating his efforts on Instore promotions, coupons, emailers and highly competitive pricing , Chandra was able to retain customers while also driving traffic online. The site started contributing to approximately 20% of the revenue. Consistent sales and revenues from his online activities (he was doing 12-15 orders per day, which is a good number for small retailers with no online expertise) encouraged him to upgrade his online store. However, in the price sensitive market, Chandra faced many issues pertaining the maintainance of MOP and discount structure. His online business had plateaued and did not witness any growth in number over the span of two years.

Marketplaces being on the rise then, Chandra choose to experiment with a few. Even though ebay was the first marketplace he was on, it was sites like Flipkart and Homeshop 18 that gave him majority of his sales. It was not a complete rosy picture- while he was successful on a few marketplaces; he had to face losses on others.

Present and future for Chandra:

2014 has been a momentous year for the Indian eCommerce industry. The efforts and promotions of online marketplaces such as like Amazon, Flipkart, Snapdeal have all been met with overwhelming success. With online shopping becoming mainstream, “to be or not to be online” is no longer a question. Like Chandra, early adopters of the online world are reaping profits now. In one of our recent interactions, Chandra said “This year my offline sales remain same as of last year but my overall turnover has considerably increased!” The 2014 festive season had given his business an undeniable push with him making sales of more than 2 crores during that duration only.

However, the future of marketplaces still seems murky. With accelerated growth in the eCommerce segment, the focus of investors, government, brands and retailers is now on it. Due to this, eCommerce rules, regulations, policies are changing daily while in parallel, major brands are increasingly selling directly on marketplaces. There is high uncertainly for retailers on marketplaces.

As Chandra puts it “Though all these marketplaces are giving me business, I worry about the future when I come across stories about marketplace losses, closures ,mergers and policy changes. The market is evolving at a rapid pace and I am apprehensive about the future”.

Chandra himself gives the solution – “I should open and focus on all retail channels. According to me I need to improve my in store as well as my online store experience for highest conversions. I now need to rethink my strategy and include new channels of retail such as social media and mobile. Customers are everywhere and I cannot afford to lose anyone!”

A few takeaways:

  • Change is the only constant; be it the customers, buying patterns or technology, they are inevitably going to change – this is something we should come in terms with.
  • With online sale portals, you break the geographical restrictions – if you have the right product at the right price, you will have customers.
  • Big player or small, that doesn’t matter,. It is important to be a part of the system.
  • Customers are buying via all channels, be present!
  • Learn from experiences. Build on your experiences and keep growing your expertise and niche.
  • Mistakes are inevitable. Don’t be discouraged if one way doesn’t work, try another. Perseverance is pivotal in being successful.
  • Adopt new ideas and think about future possibilities. Be prepared for “what if” situations. Having a problem solving attitude is the way to go in this ever changing world.
  • Own your own eCommerce site. Being only on marketplaces poses a degree of uncertainly not advisable for brand building the long-run.
  • Build on your customer relationship. A satisfied customer will keep coming back to you. Even when there is an error on your part, make sure you convey that to your customer along with your apology and reparation in the form of discount coupons, or gifts.
  • Stay alert! Make sure there are no flaws in your pricing, promotions and products. Wrong pricing or inadequate stock can lead to embarrassing situations.